U.S.A.:Ford's new model plan riles UAW
Mexico, Canada plants to build new midsize products
By Mark Truby / The Detroit News
DEARBORN -- Ford Motor Co. has shelved plans for a new car factory in Atlanta and is preparing to build its new family of midsize sedans and sport wagons in Mexico and Canada, angering some United Auto Workers leaders as both sides enter a key phase of negotiations on a new national labor pact.
Ford plans to produce its new American family car, the Futura, along with other variations of the vehicle, at a factory in Hermosillo, Mexico, beginning in 2005, according to two UAW officials and several industry analysts. Starting in 2006, the automaker is scheduled to begin production of Ford- and Lincoln-branded sport wagons at a plant in Oakville, Ontario.
The loser in this scenario is Ford's work force in Atlanta, which will now produce the aging Taurus and Sable sedans until late in the decade, UAW officials said.
The Atlanta work force was preparing to build the Futura or the sport wagons in Atlanta -- either at the existing plant or a new plant in the region -- before Ford changed plans earlier this year, said Mitchell Smith, shop chairman of UAW Local 882 in Atlanta, which represents about 2,100 Ford workers.
"It's Canada 1, Mexico 1 and the United States 0," Smith said. "It's not pretty at all for us. We know the Futura's going to Mexico and the (sport wagons) are going to Canada. They are sending all that production to other countries."
Smith said the union understands that Ford will annually produce 400,000 of the new cars in Hermosillo, Mexico, and about 200,000 of the sport wagons in Oakville, Ontario.
The new models are part of Ford's plans to build 10 midsize vehicles -- representing as many as 800,000 units of annual production -- off the basic chassis and underpinnings of the Mazda6 sedan.
Ford has not publicly announced where it will build the new vehicles.
One Ford official, however, told The Detroit News that it is likely the first of the new vehicles will indeed be built in Mexico and Canada. Other models to be built off the Mazda-based chassis and scheduled to be introduced at a later date could be produced in Atlanta once the Taurus and Sable are discontinued, the official said.
The UAW, which has 95,570 members employed by Ford, fiercely opposes the production of Big Three models for the U.S. market in foreign countries.
The union complained bitterly when GM opted to build the Chevrolet Avalanche pickup in Mexico rather than at a U.S. plant.
With Detroit automakers shedding thousands of jobs to reflect lower sales and falling U.S. market share in recent years, the union is desperate to keep jobs in the United States. The union typically uses contract bargaining to pressure automakers into building future models at U.S. plants.
But under a sweeping turnaround plan announced in early 2002, Ford plans to close assembly plants in St. Louis, Mo., and Edison, N.J., as well as an Oakville, Ontario, pickup factory and two U.S. parts plants. Combined with other production cuts, the proposed closings will reduce Ford's annual North American capacity to 4.8 million units from 5.7 million units -- eliminating 12,000 hourly jobs.
According to Smith of the UAW, the bad news for Atlanta's work force came in a town hall-style meeting in late June. At the meeting, Ford officials said the automaker was suspending plans to build a new assembly plant and a nearby supplier park in the Atlanta area, but would continue to study the idea, Smith said.
The Associated Press reported earlier this year that Ford was considering two sites for the new plant -- one in Georgia's Meriwether County, about 50 miles southwest of Atlanta, and another in Morgan County, about 60 miles east of Atlanta.
The existing Atlanta facility, built in 1947, is landlocked, ruling out an expansion of the factory and the construction of an adjacent supplier park.
The UAW's Smith said Ford informed local union officials that the Atlanta plant would continue building the Taurus and Sable sedans through the 2009 model year. Most analysts that track automotive production plans had expected the Taurus and Sable to be discontinued in 2005 or 2006.
Past their prime
The Taurus and Sable, which compete in a competitive market segment that includes the Honda Accord and Toyota Camry, are already past their prime and serve primarily to stock rental car agencies and fleet customers. With the introduction of the Futura in 2005, and the new, larger Five-Hundred sedan that will be built in Chicago beginning next year, demand for the Taurus is likely to drop sharply. The union is concerned that if Taurus and Sable demand wanes, Ford will be forced to lay off workers or eliminate a production shift in Atlanta.
"Of course we are concerned," said Clarence Williams, area director of UAW Region 8 in Smyrna, Ga. "We were looking forward to building a new product. At the last minute, they dashed our hopes. Now our people will be building a product that has outlived its styling."
Ford said it remains commited to its work force in Atlanta whether or not it decides to build a new factory in Georgia.
"We are not in a position to discuss our plans for the Atlanta plant," Ford spokesman Ed Lewis said. "We have a great work force, and we are interested in continuing Ford's presense in Georgia."
UAW International Vice President Gerald Bantom, who oversees Ford-related bargaining, did not respond to interview requests. Smith said the UAW International leaders are aware of Ford's plans to build new vehicles in Mexico and Canada. It is not clear whether the issue has come up in contact negotiations that began earlier this month.
Industry experts say Ford isn't likely to commit to building a new plant in Atlanta unless it receives significant concessions in return from the UAW.
"Everything is up for negotiation," said Sean McAlinden, who monitors labor talks for the UAW. "Why not use Atlanta for a bargaining chip? Why would you announce anything before the negotiations?"
Ford's Oakville, Ontario, facility, which builds minivans, will undergo a major renovation in the next few years. Ford is considering making an investment that would convert the plant into a flexible manufacturing site capable of building a number of different models.
Ford plans to build two sport wagons -- sometimes referred to as car-based sport utility vehicles, said Eric Merkle, an automotive analyst with IRN in Grand Rapids.
Merkle said suppliers have been informed there will be Ford and Lincoln versions of the sport wagons. Company sources said the initial plan is to build 200,000 of the new SUVs along with another 150,000 Ford Freestar and Mercury Monterey minivans at the Oakville van plant.
In early 2002, Ford announced plans to close its F-150 truck plant in Oakville in 2004 and later pledged to add 900 jobs at the adjacent Oakville van plant as part of a settlement with Canadian unions.
Ford's plant in Hermosillo, Mexico, which employs 2,400 workers, builds Ford Focus two-door hatchbacks and four-door hatchbacks.
When Hermosillo begins building the Futura, Ford has the option of moving Focus production to its plant in Wayne, Mich., which currently builds Focus sedans and wagons.
My first car was a 67 Mustang Coupe, 2nd one was a 67 Cougar XR-7, 3rd one was a 66 Mustang Coupe. Why did I get rid of these cars for ? I know why, because I'm stupid, stupid, stupid.
My next Ford.....